China's largest theater owner Wanda group has reached an agreement with AMC Entertainment, the second-largest movie theater chain in North America, under which it will acquire the chain.

The agreement signed today makes Wanda the largest exhibitor in world's second largest film market and the second largest in the biggest market.

The transaction is valued at about $2.6 billion. Wanda intends to invest up to an additional $500 million in AMC over time to fund its strategic and operating initiatives.

Wanda has reached an agreement to secure employment of AMC's management team. The transaction is not expected to have an impact on employee levels at AMC.

AMC has been owned since 2004 by an investment group that includes the Apollo Investment Fund, J. P. Morgan Partners, Bain Capital Investors, the Carlyle Group and others.

As the second largest theater chain in North America, AMC runs 346 theaters with 5,034 screens.

Wanda operates a variety of businesses including commercial properties, luxury hotels, tourism investment and department stores.

It has shown intense interest in the cultural industry since 2005 and has been involved in film production and distribution. The group now owns 86 multiplex locations and 730 screens. It also owns 47 IMAX screens, the most among Chinese theaters. The negotiation started in the first half of 2010.